ICONIX BRAND GROUP, INC. RESTRICTED STOCK AGREEMENT
Exhibit
10.7
To:
Date
of
Award: ________
You
are
hereby awarded, effective as of the date hereof, ____ shares (the “Shares”) of
common stock, $.001 par value (“Common Stock”), of Iconix Brand Group, Inc., a
Delaware corporation (the “Company”), pursuant to the Company’s 2006 Equity
Incentive Plan (the “Plan”), subject to certain restrictions specified below in
Restrictions and
Forfeiture. (While
subject to the Restrictions, this Agreement refers to the Shares as “Restricted
Shares”.)
During
the period commencing on the Award Date and terminating on ______ (the
“Restricted Period”), except as otherwise provided herein, the Shares may not be
sold, assigned, transferred, pledged, or otherwise encumbered and are subject
to
forfeiture (the “Restrictions”).
Except
as
set forth below, the Restricted Period with respect to the Shares will lapse
in
accordance with the vesting schedule set forth below (the “Vesting Schedule”).
Subject to the restrictions set forth in the Plan, the Administrator (as defined
in the Plan) shall have the authority, in its discretion, to accelerate the
time
at which any or all of the Restrictions shall lapse with respect to any Shares
subject thereto, or to remove any or all of such Restrictions, whenever the
Administrator may determine that such action is appropriate by reason of changes
in applicable tax or other laws, or other changes in circumstances occurring
after the commencement of the Restricted Period.
In
addition to the terms, conditions, and restrictions set forth in the Plan,
the
following terms, conditions, and restrictions apply to the Restricted
Shares:
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Restrictions
and Forfeiture
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You
may not sell, assign, pledge, encumber, or otherwise transfer any
interest
in the Restricted Shares until the dates set forth in the Vesting
Schedule, at which point the Restricted Shares will be referred to
as
“Vested.”
If
your employment is terminated by the Company for Cause or by you
without
Good Reason (as such terms are defined in your Employment Agreement
with
the Company (the “Employment Agreement”)), the Company will have the right
to reacquire your unvested Restricted Shares at the lower of (a)
your
original purchase price, if any, for such Shares, or (b) the fair
market
value of the Shares on your date of termination. If there was no
purchase
price, your unvested Restricted Shares will be forfeited.
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Vesting
Schedule
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Assuming
you provide Continuous Service (as defined in herein) as an Employee
(as
defined in the Plan) of the Company or an Affiliate of the Company,
all
Restrictions will lapse on the Restricted Shares on the Vesting date
or
Vesting dates set forth in the schedule below for the applicable
grant of
Restricted Shares and they will become Vested.
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| Vesting Schedule | |
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Vesting
Date
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Number
of Restricted Shares that Vest
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[DATE]
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__
Restricted Shares
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[DATE]
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___
Restricted Shares
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Change
in Control
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In
the event of a Change in Control (as defined in the Plan), if within
twelve (12) months after the Change in Control, your employment is
terminated by the Company without Cause or by you for Good Reason
(as such
terms are defined in the Employment Agreement), all of the Restricted
Shares shall thereupon become fully vested.
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Continuous
Service
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“Continuous
Service,” as used herein, means the absence of any interruption or
termination of your service as an Employee (as defined in the Plan)
of the
Company or any Affiliate (other than a termination by the Company
without
Cause or a termination by you for Good Reason). If you are employed
by an
Affiliate of the Company, your employment shall be deemed to have
terminated on the date your employer ceases to be an Affiliate of
the
Company, unless you are on that date transferred to the Company or
another
Affiliate of the Company. Service shall not be considered interrupted
in
the case of sick leave, military leave or any other leave of absence
approved by the Company or any then Affiliate of the Company. Your
employment shall not be deemed to have terminated if you are transferred
from the Company to an Affiliate of the Company, or vice versa, or
from
one Company Affiliate to another Company Affiliate.
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Share
Certificates
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The
Company will issue a certificate (or certificates) in your name with
respect to the Shares, and will hold such certificate (or certificates)
on
deposit for your account until the expiration of the Restricted Period
with respect to the Shares represented thereby. Such certificate
(or
certificates) will contain the following restrictive legend:
“The
transferability of this certificate and the shares of stock represented
hereby are subject to the terms and conditions (including forfeiture)
contained in the 2006 Equity Incentive Plan of the Company, copies
of
which are on file in the office of the Secretary of the
Company.”
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Additional
Conditions to Issuance of Stock Certificates
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You
will not receive the certificates representing the Restricted Shares
unless and until the Company has received a stock power or stock
powers in
favor of the Company executed by you.
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Cash
Dividends
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Cash
dividends, if any, paid on the Restricted Shares shall be held by
the
Company for your account and paid to you upon the expiration of the
Restricted Period, except as otherwise determined by the Administrator.
All such withheld dividends shall not earn interest, except as otherwise
determined by the Administrator. You
will not receive withheld cash dividends on any Restricted Shares
which
are forfeited and all such cash dividends shall be forfeited along
with
the Restricted Shares which are forfeited.
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Tax
Withholding
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Unless
you make an election under Section 83(b) of the Internal Revenue
Code of
1986, as amended (the “Code”), and pay taxes in accordance with that
election, you will be taxed on the Shares as they become Vested and
must
arrange to pay the taxes on this income. If the Administrator so
determines, arrangements for paying the taxes may include your
surrendering Shares that otherwise would be released to you upon
becoming
Vested or your surrendering Shares you already own. The fair market
value
of the Shares you surrender, determined as of the date when taxes
otherwise would have been withheld in cash, will be applied as a
credit
against the withholding taxes.
The
Company shall have the right to withhold from your compensation an
amount
sufficient to fulfill its or its Affiliate’s obligations for any
applicable withholding and employment taxes. Alternatively, the Company
may require you to pay to the Company the amount of any taxes which
the
Company is required to withhold with respect to the Shares, or, in
lieu
thereof, to retain or sell without notice a sufficient number of
Shares to
cover the amount required to be withheld. The Company may withhold
from
any cash dividends paid on the Restricted Shares an amount sufficient
to
cover taxes owed as a result of the dividend payment. The Company’s method
of satisfying its withholding obligations shall be solely in the
discretion of the Administrator, subject to applicable federal, state,
local and foreign laws. The Company shall have a lien and security
interest in the Shares and any accumulated dividends to secure your
obligations hereunder.
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Tax
Representations
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You
hereby represent and warrant to the Company as follows:
(a) You
have reviewed with your own tax advisors the federal, state, local
and
foreign tax consequences of this investment and the transactions
contemplated by this Agreement. You are relying solely on such advisors
and not on any statements or representations of the Company or any
of its
Employees or agents.
(b) You
understand that you (and not the Company) shall be responsible for
your
own tax liability that may arise as a result of this investment or
the
transactions contemplated by this Agreement. You understand that
Section
83 of the Code taxes (as ordinary income) the fair market value of
the
Shares as of the date any “restrictions” on the Shares lapse. To the
extent that an award hereunder is not otherwise an exempt transaction
for
purposes of Section 16(b) of the Securities Exchange Act of 1934,
as
amended (the “1934 Act”), with respect to officers, directors and 10%
shareholders subject to Section 16 of the 1934 Act, a “restriction” on the
Shares includes for these purposes the period after the award of
the
Shares during which such officers, directors and 10% shareholders
could be
subject to suit under Section 16(b) of the 1934 Act. Alternatively,
you
understand that you may elect to be taxed at the time the Shares
are
awarded rather than when the restrictions on the Shares lapse, or
the
Section 16(b) period expires, by filing an election under Section
83(b) of
the Code with the Internal Revenue Service within thirty (30) days
from
the date of the award.
YOU
HEREBY ACKNOWLEDGE THAT IT IS YOUR SOLE RESPONSIBILITY AND NOT THE
COMPANY’S TO FILE TIMELY THE ELECTION AVAILABLE TO YOU UNDER SECTION 83(B)
OF THE CODE, EVEN IF YOU REQUEST THAT THE COMPANY OR ITS REPRESENTATIVES
MAKE THIS FILING ON YOUR BEHALF.
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Securities
Law Representations
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The
following two paragraphs shall be applicable if, on the date of issuance
of the Restricted Shares, no registration statement and current prospectus
under the Securities Act of 1933, as amended (the “1933 Act”), covers the
Shares, and shall continue to be applicable for so long as such
registration has not occurred and such current prospectus is not
available:
(a) You
hereby agree, warrant and represent that you will acquire the Shares
to be
issued hereunder for your own account for investment purposes only,
and
not with a view to, or in connection with, any resale or other
distribution of any of such shares, except as hereafter permitted.
You
further agree that you will not at any time make any offer, sale,
transfer, pledge or other disposition of such Shares to be issued
hereunder without an effective registration statement under the 1933
Act,
and under any applicable state securities laws or an opinion of counsel
acceptable to the Company to the effect that the proposed transaction
will
be exempt from such registration. You agree to execute such instruments,
representations, acknowledgments and agreements as the Company may,
in its
sole discretion, deem advisable to avoid any violation of federal,
state,
local or foreign law, rule or regulation, or any securities exchange
rule
or listing agreement.
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(b) The
certificates for Shares to be issued to you hereunder shall bear
the
following legend:
“The
shares represented by this certificate have not been registered under
the
Securities Act of 1933, as amended, or under applicable state securities
laws. The shares have been acquired for investment and may not be
offered,
sold, transferred, pledged or otherwise disposed of without an effective
registration statement under the Securities Act of 1933, as amended,
and
under any applicable state securities laws or an opinion of counsel
acceptable to the Company that the proposed transaction will be exempt
from such registration.”
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Stock
Dividend, Stock Split and Similar Capital Changes
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In
the event of any change in the outstanding shares of the Common Stock
of
the Company by reason of a stock dividend, stock split, combination
of
shares, recapitalization, merger, consolidation, transfer of assets,
reorganization, conversion or what the Administrator deems in its
sole
discretion to be similar circumstances, the number and kind of shares
subject to this Agreement shall be appropriately adjusted in a manner
to
be determined in the sole discretion of the Administrator, whose
decision
shall be final, binding and conclusive in the absence of clear and
convincing evidence of bad faith. Any shares of Common Stock or other
securities received, as a result of the foregoing, by you with respect
to
the Restricted Shares shall be subject to the same restrictions as
the
Restricted Shares, the certificate or other instruments evidencing
such
shares of Common Stock or other securities shall be legended and
deposited
with the Company as provided above with respect to the Restricted
Shares,
and any cash dividends received with respect to such shares of Common
Stock or other securities shall be accumulated as provided above
with
respect to the Restricted Shares.
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Non-Transferability
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Restricted
Shares are not transferable.
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No
Effect on Employment
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Except
as otherwise provided in the Employment Agreement, nothing herein
shall
modify your status as an at-will employee of the Company or any of
its
Affiliates. Further, nothing herein guarantees you employment for
any
specified period of time. This means that, except as provided in
the
Employment Agreement, either you or the Company or any of its Affiliates
may terminate your employment at any time for any reason, with or
without
cause, or for no reason. You recognize that, for instance, you may
terminate your employment or the Company or any of its Affiliates
may
terminate your employment prior to the date on which your Shares
become
vested.
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No
Effect on Corporate Authority
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You
understand and agree that the existence of this Agreement will not
affect
in any way the right or power of the Company or its shareholders
to make
or authorize any or all adjustments, recapitalizations, reorganizations,
or other changes in the Company’s capital structure or its business, or
any merger or consolidation of the Company, or any issuance of bonds,
debentures, preferred or other stocks with preferences ahead of or
convertible into, or otherwise affecting the common shares or the
rights
thereof, or the dissolution or liquidation of the Company, or any
sale or
transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or
otherwise.
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Arbitration
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Any
dispute or disagreement between you and the Company with respect
to any
portion of this Agreement (excluding Attachment A hereto) or its
validity,
construction, meaning, performance or your rights hereunder shall,
unless
the Company in its sole discretion determines otherwise, be settled
by
arbitration, at a location designated by the Company, in accordance
with
the Commercial Arbitration Rules of the American Arbitration Association
or its successor, as amended from time to time. However, prior to
submission to arbitration you will attempt to resolve any disputes
or
disagreements with the Company over this Agreement amicably and
informally, in good faith, for a period not to exceed two weeks.
Thereafter, the dispute or disagreement will be submitted to arbitration.
At any time prior to a decision from the arbitrator(s) being rendered,
you
and the Company may resolve the dispute by settlement. You and the
Company
shall equally share the costs charged by the American Arbitration
Association or its successor, but you and the Company shall otherwise
be
solely responsible for your own respective counsel fees and expenses.
The
decision of the arbitrator(s) shall be made in writing, setting forth
the
award, the reasons for the decision and award and shall be binding
and
conclusive on you and the Company. Further, neither you nor the Company
shall appeal any such award. Judgment of a court of competent jurisdiction
may be entered upon the award and may be enforced as such in accordance
with the provisions of the award.
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Governing
Law
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The
laws of the State of Delaware will govern all matters relating to
this
Agreement, without regard to the principles of conflict of
laws.
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Notices
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Any
notice you give to the Company must be in writing and either
hand-delivered or mailed to the office of the Chief Executive Officer
of
the Company. If mailed, it should be addressed to the Chief Executive
Officer of the Company at its then main headquarters. Any notice
given to
you will be addressed to you at your address as reflected on the
personnel
records of the Company. You and the Company may change the address
for
notice by like notice to the other. Notice will be deemed to have
been
duly delivered when hand-delivered or, if mailed, on the day such
notice
is postmarked.
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Agreement
Subject to Plan; Entire Agreement
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This
Agreement shall be subject to the terms of the Plan in effect on
the date
hereof, which terms are hereby incorporated herein by reference and
made a
part hereof. This Agreement constitutes the entire understanding
between
the Company and you with respect to the subject matter hereof and
no
amendment, supplement or waiver of this Agreement, in whole or in
part,
shall be binding upon the Company unless in writing and signed by
the
President of the Company
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Conflicting
Terms
|
Wherever
a conflict may arise between the terms of this Agreement and the
terms of
the Plan in effect on the date hereof, the terms of the Plan will
control.
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Attachment
A
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In
consideration of the award to you of Restricted Shares, you hereby
agree
to the confidentiality and non-interference provisions set forth
in
Attachment A hereto.
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Please
sign the copy of this Restricted Stock Agreement and return it to the Company’s
Secretary, thereby indicating your understanding of and agreement with its
terms
and conditions, including
Attachment A hereto.
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ACKNOWLEDGMENT
I
hereby
acknowledge receipt of a copy of the Plan. I hereby represent that I have read
and understood the terms and conditions of the Plan and of the Restricted Stock
Agreement, including
Attachment A hereto.
I
hereby signify my understanding of, and my agreement with, the terms and
conditions of the Plan and of the Restricted Stock Agreement, including
Attachment A hereto.
I agree
to accept as binding, conclusive, and final all decisions or interpretations
of
the Administrator concerning any questions arising under the Plan with respect
to this Restricted Stock Agreement. I accept this Restricted Stock Agreement
in
full satisfaction of any previous written or oral promise made to me by the
Company or any of its Affiliates with respect to option or stock
grants.
Date:
____________________
__________________________________
[OFFICER]
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Attachment
A to Restricted Stock Agreement
Confidentiality
and Non-Interference.
(a) You
covenant and agree that, in consideration of the award to you of Restricted
Shares, you will not, during your employment with the Company or at any time
thereafter, except with the express prior written consent of the Company or
pursuant to the lawful order of any judicial or administrative agency of
government, directly or indirectly, disclose, communicate or divulge to any
individual or entity, or use for the benefit of any individual or entity, any
knowledge or information with respect to the conduct or details of the Company’s
business which you, acting reasonably, believe or should believe to be of a
confidential nature and the disclosure of which not to be in the Company’s
interest.
(b) You
covenant and agree that, in consideration of the award to you of Restricted
Shares, you will not, during your employment with the Company, except with
the
express prior written consent of the Company, directly or indirectly, whether
as
employee, owner, partner, member, consultant, agent, director, officer,
shareholder or in any other capacity, engage in or assist any individual or
entity to engage in any act or action which you, acting reasonably, believe
or
should believe would be harmful or inimical to the interests of the
Company.
(c) You
covenant and agree that, in consideration of the award to you of Restricted
Shares, you will not, for a period of two years after your employment with
the
Company ceases for any reason whatsoever (whether voluntary or not), except
with
the express prior written consent of the Company, directly or indirectly,
whether as employee, owner, partner, member, consultant, agent, director,
officer, shareholder or in any other capacity, for your own account or for
the
benefit of any individual or entity, (i) solicit any customer of the Company
for
business which would result in such customer terminating their relationship
with
the Company; or (ii) solicit or induce any individual or entity which is an
employee of the Company to leave the Company or to otherwise terminate their
relationship with the Company.
(d) The
parties agree that any breach by you of any of the covenants or agreements
contained in this Attachment A will result in irreparable injury to the Company
for which money damages could not adequately compensate the Company and
therefore, in the event of any such breach, the Company shall be entitled (in
addition to any other rights and remedies which it may have at law or in equity)
to have an injunction issued by any competent court enjoining and restraining
you and/or any other individual or entity involved therein from continuing
such
breach. The existence of any claim or cause of action which you may have against
the Company or any other individual or entity shall not constitute a defense
or
bar to the enforcement of such covenants. If the Company is obliged to resort
to
the courts for the enforcement of any of the covenants or agreements contained
in this Attachment A, or if such covenants or agreements are otherwise the
subject of litigation between the parties, and the Company prevails in such
enforcement or litigation, then the term of such covenants and agreements shall
be extended for a period of time equal to the period of such breach, which
extension shall commence on the later of (a) the date on which the original
(unextended) term of such covenants and agreements is scheduled to terminate
or
(b) the date of the final court order (without further right of appeal)
enforcing such covenant or agreement.
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(e) If
any
portion of the covenants or agreements contained in this Attachment A, or the
application hereof, is construed to be invalid or unenforceable, the other
portions of such covenant(s) or agreement(s) or the application thereof shall
not be affected and shall be given full force and effect without regard to
the
invalid or unenforceable portions to the fullest extent possible. If any
covenant or agreement in this Attachment A is held unenforceable because of
the
area covered, the duration thereof, or the scope thereof, then the court making
such determination shall have the power to reduce the area and/or duration
and/or limit the scope thereof, and the covenant or agreement shall then be
enforceable in its reduced form.
(f) For
purposes of this Attachment A, the term “the Company” shall include the Company,
any successor to the Company and all present and future direct and indirect
subsidiaries and affiliates of the Company.
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